Latest / The Money Puzzle / Beyond property: Why it's time to widen your investment horizon

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Beyond property: Why it's time to widen your investment horizon · The Money Puzzle

0:10
Speaker 1: Hello, Welcome to The Australian's Money Puzzle podcast.
0:12
Speaker 2: I'm James Kirkby. Welcome aboard everybody.
0:15
Speaker 1: You might be a little frustrated, perhaps confused perhaps with
0:18
Speaker 1: the leaks that are sort of rolling streaming out from
0:23
Speaker 1: Parliament House over next week's budget which comes in next Tuesday,
0:29
Speaker 1: May twelve, and we'll do a special post budget with
0:32
Speaker 1: Will Hamilton on May fourteen. These leaks are signaling there
0:36
Speaker 1: will be a substantial crackdown on capital gains tax and
0:39
Speaker 1: negative gearing, which is going to hit property for sure.
0:43
Speaker 1: So today we're going to look beyond property what you
0:47
Speaker 1: may not have previously considered as a diversified investor, and
0:51
Speaker 1: also inside share markets, inside shares if you like. Part
0:56
Speaker 1: of the outcome perhaps of this CGT change is and
1:00
Speaker 1: it's distinctly possible that value stocks or high dividend paying
1:06
Speaker 1: stocks become even more attractive onto this regime. I don't
1:10
Speaker 1: know if that's necessarily a good thing. We'll talk about
1:13
Speaker 1: that to. My guest today is Jack toussl a financial
1:17
Speaker 1: advisor with the Partners Wealth Group. He created quite a
1:20
Speaker 1: stir the last time he was on the show for
1:22
Speaker 1: a few things. He said, how are you Jack.
1:25
Speaker 3: I'm going well, thanks for having me on again.
1:27
Speaker 2: James, great to have you on again.
1:29
Speaker 1: During the show, I must when we talk about Properly,
1:31
Speaker 1: I must talk about the survey we did after your appearance.
1:35
Speaker 1: But first, let's just have a look at this notion
1:38
Speaker 1: that perhaps many investors might have to look a bit
1:42
Speaker 1: wider than they have previously with some of the changes.
1:46
Speaker 1: You've been sort of pushing this barrow anyway, that we're
1:49
Speaker 1: not diversified enough, that we don't look widely enough as investors.
1:55
Speaker 2: So when you make those remarks.
1:58
Speaker 1: About properly about her people that are sort of obsessed
2:01
Speaker 1: with it, what are the areas you think that we
2:04
Speaker 1: should be looking at.
2:06
Speaker 3: There's a wide range of different investment options, and that's
2:09
Speaker 3: the thing which I'd say annoys me the most. I
2:11
Speaker 3: feel like it's strange in general, have this very tunnel
2:14
Speaker 3: vision view the only way to make money, get rich
2:19
Speaker 3: is via property, and there's many of other alternities out there,
2:22
Speaker 3: and we've spoken about in the past, but once which
2:25
Speaker 3: I'm very big on from the investment perspective, are private
2:29
Speaker 3: type assets, the private equity or private credit as well,
2:32
Speaker 3: which often get neglected in terms of talk talking about.
2:37
Speaker 2: Yes, well, it's interesting.
2:39
Speaker 1: There seems to be and inexorable perhaps trend towards this
2:45
Speaker 1: private capital and private equity. At the same time, because
2:49
Speaker 1: perhaps we as a local marketers are a little bit
2:54
Speaker 1: behind the developments that are happening in the US, we're
2:57
Speaker 1: also seeing what can go wrong. To start off on
3:00
Speaker 1: a negative on this, but people are asking. So we
3:03
Speaker 1: see the big groups in private capital and private acaty
3:06
Speaker 1: we all know who they are, Blackstone and Morgan, Stanley, etc.
3:10
Speaker 2: Blackrock, That's all fine.
3:11
Speaker 1: More recently we're seeing big Australian groups, very well known
3:15
Speaker 1: groups starting to move in there perpetual. I see this week,
3:18
Speaker 1: Regal this week at the Macquarie conference which is on
3:22
Speaker 1: this week, or talking how excited they are.
3:23
Speaker 2: I'm pushing into this area. Here's the thing.
3:26
Speaker 1: At the same time, there are a lot of issues
3:29
Speaker 1: forming in that market. I know returns have been good,
3:32
Speaker 1: but there's a lot of conflicts of interest.
3:34
Speaker 2: Being revealed there.
3:36
Speaker 1: There are real controversy arounds some of the way they
3:38
Speaker 1: do things, some of the accounting, continuity vehicles, all that
3:41
Speaker 1: sort of thing, and Blue Owl, which, whether they like
3:44
Speaker 1: it or not, they've become the sort of poster child
3:46
Speaker 1: for all that's wrong with private equity. Just now their
3:50
Speaker 1: share price is down about forty percent. This is one
3:52
Speaker 1: of the big private equity groups folks. And we mentioned
3:54
Speaker 1: perhaps on the show that some local groups codec Capital
3:58
Speaker 1: for instance, are quite have quite a significant exposure there.
4:01
Speaker 2: So do nngs.
4:02
Speaker 1: Super So, how does someone listen to the show decode
4:07
Speaker 1: all this, Jack, How do they sort of find a
4:11
Speaker 1: navigator way through this new area where there are where
4:15
Speaker 1: there's trouble being reported already?
4:19
Speaker 3: Well, I can touch on the prior credit side of things.
4:21
Speaker 3: You bring up blowout a great point private credit. Not
4:27
Speaker 3: all private credit funds are created equal, right, So expectively
4:32
Speaker 3: your act as a bank, you're lending out money, you
4:34
Speaker 3: get paid a return, and usually what you do is
4:37
Speaker 3: you'll be secured against some form of asset. Now having
4:42
Speaker 3: the money you've went out secured against a hard access say,
4:45
Speaker 3: for example, lend or property, very different from a risk
4:48
Speaker 3: perspective to what some of these more risky prior type
4:53
Speaker 3: credit funds lending out to software companies where the assets
4:57
Speaker 3: are just numbers on the page for or completely.
5:00
Speaker 1: They're not secured by assets which we would traditionally regard
5:05
Speaker 1: as secure like a building. They're secured by an imaginary.
5:10
Speaker 3: Future exactly now you're intangible type assets. So actually knowing
5:16
Speaker 3: what it's secured against, how is it a big thing
5:19
Speaker 3: there as well? There's quite a wide range of different risks.
5:23
Speaker 1: Well Hamilton and others who have been on the show
5:25
Speaker 1: to say that listen, you know it's a total let's
5:28
Speaker 1: just split it into private credit and private equity. But
5:30
Speaker 1: he makes the point that private credit in Australia is
5:33
Speaker 1: a different beast, that it's much.
5:34
Speaker 2: More secure, that it's narrower, that.
5:38
Speaker 1: It is by implication, safer than the US, where it
5:43
Speaker 1: has sort of evolved into some very exotic versions of
5:47
Speaker 1: the same thing.
5:48
Speaker 2: Do you go along with that?
5:52
Speaker 3: Yes, generally speaking, okay, I'll be honest on an across
5:58
Speaker 3: all the US type five but that's what I've been
6:00
Speaker 3: here as well. What your options are in Australia are
6:04
Speaker 3: a bit more secure and a touch wood you'd have
6:07
Speaker 3: to go through the individual data of age type of
6:09
Speaker 3: fun there.
6:11
Speaker 1: Generally speaking, yes, So how come we were never but
6:17
Speaker 1: this was never put in front of us before? Why
6:20
Speaker 1: it's how come it's so great now? It wasn't it
6:22
Speaker 1: great ten years ago? Twenty years ago?
6:26
Speaker 3: Private aircream, private credit. I think probably the main I
6:28
Speaker 3: think it probably Woughts. It's good ten or twenty easier.
6:32
Speaker 3: I think what's challenge is it's become more accessible now
6:34
Speaker 3: to the populace. One of those who are wholesale aligible not,
6:38
Speaker 3: I say.
6:39
Speaker 1: Yes, So generally we're talking about people. The accessibility here
6:43
Speaker 1: in the main is for sophisticated investors folks, which I'm
6:46
Speaker 1: sure you know the definition. If you don't, you need
6:48
Speaker 1: two point five million in assets or a salary of
6:52
Speaker 1: two fifty grand for.
6:53
Speaker 2: Two years in a row.
6:54
Speaker 1: A very soft definition, not as big as it sounds, because,
6:58
Speaker 1: believe it or not, they will include your house, which I.
7:00
Speaker 2: Think is a joke. But there you are.
7:02
Speaker 1: Now, what else Jack should people be thinking about in
7:09
Speaker 1: terms of seriously diversifying their portfolios. Can we look at
7:13
Speaker 1: the share market itself? I mean, are people too narrowly
7:17
Speaker 1: concentrated in that area too?
7:21
Speaker 3: I in terms of say, whether it's Australian exposure, are
7:24
Speaker 3: you talking to or with whatever?
7:26
Speaker 2: Whatever?
7:26
Speaker 3: Yeah, we're definitely. I've spoken about this in the past.
7:29
Speaker 3: You know. One of the big things he's investors often
7:32
Speaker 3: have a home country bias. Now, if you look at
7:35
Speaker 3: the last fifteen years, the S and P five hundred,
7:41
Speaker 3: the main index in the US is fatally done double
7:44
Speaker 3: pre Astralia year after year. Yeah, yeah, exactly. Oh that
7:51
Speaker 3: year is far bigger than that. So if you just say, look,
7:54
Speaker 3: I live in Australia, I only want to invest in
7:57
Speaker 3: Australian chase, effectively shoot yourself in the foot into to
8:00
Speaker 3: your long term growth prospects.
8:03
Speaker 1: So how would you begin that process? If I said
8:07
Speaker 1: to you, look, I'm convinced by what you say, but
8:11
Speaker 1: I've never done private equity, never done private credit, don't
8:14
Speaker 1: really have much offshore except I've got one big, fat
8:18
Speaker 1: ETF that's called US shares ETF and guess what Yeah,
8:23
Speaker 1: it does fifteen percent a year. Well, currency adjusted, of course,
8:27
Speaker 1: it's a different thing. But how would the listener begin
8:31
Speaker 1: this process of diversify. What would be a sensible way
8:34
Speaker 1: to step through it?
8:36
Speaker 3: Well, I think from private credit projectly perspective, you'd ideally
8:40
Speaker 3: want to go to the investor if he's got connections
8:44
Speaker 3: within the industry and got access to higher quartile funds,
8:48
Speaker 3: rather than just run in real tops in saying that
8:52
Speaker 3: your average priorit equity is still far superior. Boy, the
8:55
Speaker 3: long run, then your puwer equity. I had some goods
8:59
Speaker 3: toartistics here over the last thirty five years. If you
9:02
Speaker 3: had to put one hundred thousand dollars in the SMP
9:05
Speaker 3: five hundred and got the nine point five percent return,
9:10
Speaker 3: it would have grown to two point four million. That's
9:12
Speaker 3: thirty five years. If you had to put the same
9:14
Speaker 3: hundred thousand dollars into an average returning private equity fund,
9:19
Speaker 3: not top quartile, just average done fourteen point two percent,
9:25
Speaker 3: instead of having two point four million dollars, you'd have
9:28
Speaker 3: ten million, four hundred thousand dollars.
9:30
Speaker 2: Extraordinary. Where are those figures from Tony Robbins.
9:34
Speaker 3: I'm not sure if you've read his most recent book,
9:37
Speaker 3: Speck specifically about this interviewing with some of the wealthiest
9:40
Speaker 3: billionaires in the world, and we came across was really
9:45
Speaker 3: the way they can leverage your potential growth to the
9:48
Speaker 3: mats is private equity. There's an old saying that ninety
9:51
Speaker 3: percent of millionaires make their money on property, but one
9:54
Speaker 3: hundred percent of billionaires make their money on private equity.
9:56
Speaker 1: That's really interesting, and I have I mean, obviously Tony
10:00
Speaker 1: Robins around a long time, and I'm quite aware of
10:02
Speaker 1: those videos and podcasts.
10:06
Speaker 2: Do you worry at all.
10:07
Speaker 1: That it's the peak that you know? It's the old
10:12
Speaker 1: thing about the bandwagon. Once you can see it, it's
10:14
Speaker 1: too late.
10:17
Speaker 3: Just as a class in general, I don't think the
10:20
Speaker 3: private great things are going to go awy anytime soon.
10:24
Speaker 3: You look at the US for example, when nineteen ninety
10:26
Speaker 3: six there were over eight thousand companies listed, do you
10:31
Speaker 3: know how many they are listed now in twenty twenty
10:33
Speaker 3: six less than four thousand.
10:37
Speaker 1: Yeah, that's really interesting. It's shrinking, and so is the AX.
10:39
Speaker 1: The AX is shrinking. There was more stocks on the
10:42
Speaker 1: SX five years ago than today.
10:43
Speaker 3: Yeah, how much big are the US capital markets are
10:47
Speaker 3: compared to what they are years ago?
10:49
Speaker 2: Interesting?
10:50
Speaker 3: And this West company's available to everyday right right?
10:54
Speaker 1: And then even inside those companies there's enormous concentration. Obviously
10:59
Speaker 1: with the tech company it's a bit of Magnificent seven
11:01
Speaker 1: kind of.
11:02
Speaker 3: Exactly we're spoken about that for that, there's some index
11:07
Speaker 3: fondich you think at diverse part and quite as diverse
11:11
Speaker 3: bod as what you might think.
11:12
Speaker 1: Yes, yeah, okay, now what we'll do I wonder after
11:15
Speaker 1: the break, we're going to have a quick look at
11:17
Speaker 1: some of the issues that you should know now that
11:22
Speaker 1: are going to come front and center in the next
11:25
Speaker 1: few weeks on the basis that these budget leaks are true,
11:27
Speaker 1: and I expect by the way that they are Okay.
11:29
Speaker 1: Back to you in a moment. Hello, Welcome back to
11:41
Speaker 1: The Australian's Money Puzzle podcast, talking this morning with Jack
11:44
Speaker 1: toussl of The Partner's Wealth Group financial advisor. Now, I
11:47
Speaker 1: mentioned when Jack was on the show the last time,
11:50
Speaker 1: he said that, well, he talked about property. Your property
11:55
Speaker 1: strategy is overrated and he said we have an ingratiated
12:00
Speaker 1: obsession with property. And then he did some numbers and
12:04
Speaker 1: he showed how you could make much more money elsewhere. Well,
12:09
Speaker 1: we did the survey, Jack, and we said, forget about
12:14
Speaker 1: rent money being dead money. Financial advisor Jack toss and
12:17
Speaker 1: thinks the bigger issue is the dollars left lying inside
12:20
Speaker 1: the home mortgage for decades while tax deductible investment opportunities
12:25
Speaker 1: outside the family home get missed.
12:27
Speaker 2: Now here's a really interesting thing.
12:29
Speaker 4: You know.
12:29
Speaker 1: We had one one hundred and eighty four votes polled.
12:34
Speaker 1: And I'll tell you something, Jack, I get press releases
12:36
Speaker 1: and media releases all the time about surveys, and I
12:39
Speaker 1: look at them and I ring them and I say
12:41
Speaker 1: how many people were involved in the survey and they
12:43
Speaker 1: say one thousand, So we've got more. I don't take
12:46
Speaker 1: some of those seriously, but we've got more than some
12:48
Speaker 1: of those surveys. So one hundred and eighty four votes
12:52
Speaker 1: were polled. The question was posed, is your home the
12:56
Speaker 1: worst investment you will ever make?
12:58
Speaker 2: The number of.
12:59
Speaker 1: People who said no, that's not true. Were are you
13:01
Speaker 1: ready eighty two percent? The number who said yes, we're
13:04
Speaker 1: eighty percent. So I've gotta tell you it didn't convince Manny, Jack.
13:10
Speaker 3: No, man, you get me on what I can give
13:11
Speaker 3: you some The good thing about finances, it's not a democracy, James,
13:15
Speaker 3: it's a lot instead.
13:16
Speaker 4: And now I'm were starting the numbers very true, it's
13:20
Speaker 4: not a yeah, that's right, hey, which takes us the
13:23
Speaker 4: perfect segaway to the original Benjamin Graham intelligent investor line
13:28
Speaker 4: about it's not a voting machine in the long.
13:31
Speaker 1: Term, it's a weighing machine. You see, it's starting to
13:34
Speaker 1: make sense. Now you can see how it makes sense. Okay, now, Jack,
13:37
Speaker 1: on serious matters. Here's the thing I sent to you earlier.
13:41
Speaker 1: Jonathan Kurns is the chief economist at the Challenger Group,
13:45
Speaker 1: and he had a quick look at CGT and how
13:49
Speaker 1: it might have been. The CGT changes that are kind
13:51
Speaker 1: of come into effect in a few days. That is,
13:53
Speaker 1: they're going to be announced in a few days. And folks,
13:57
Speaker 1: if you are familiar with the LEE is, basically they're
14:01
Speaker 1: saying the fifty percent discount you get on an asset
14:03
Speaker 1: held for more than a year is going to be
14:05
Speaker 1: replaced with the original indexation system, which where basically it's
14:09
Speaker 1: inflation adjusted every year. Now, before we talk about shares
14:13
Speaker 1: in particular, what Karen said, Jack, you are skeptical that
14:22
Speaker 1: this is so bad, tell us why.
14:24
Speaker 3: The moving to index ash If you actually look at
14:26
Speaker 3: the numbers right, index actionion can actually mean more beneficial
14:31
Speaker 3: the longer you hold the asset. So sort of Tom Banos,
14:34
Speaker 3: who's running the numbers, want to property for example, how
14:37
Speaker 3: for twelve years typical three percent return, he actually ended
14:41
Speaker 3: up our first twelve years pain less capital games tax
14:45
Speaker 3: using the indexation method be into a fifty percent discount.
14:48
Speaker 3: Who the fifty percent discount actually benefits the most? What
14:53
Speaker 3: we shall after twelve months, in one day, the earliest
14:56
Speaker 3: you shall when now it's always want to get the
14:58
Speaker 3: maximum better from that which are encourages what we spoke
15:02
Speaker 3: about short term flippers for example.
15:05
Speaker 1: So so would it be fair to say the CDT change,
15:08
Speaker 1: as you understand, will really hit property flippers and traders
15:11
Speaker 1: rather than Yeah, okay, so it hits the traders, all right,
15:17
Speaker 1: and so is the corollary of that then we should
15:20
Speaker 1: all invest for longer outside.
15:23
Speaker 3: Yes especially so funny, true boss, I'd holly recommend.
15:26
Speaker 1: That, assuming you picked, you got to get the investment
15:30
Speaker 1: right in the first place, don't you. Yeah, okay, okay.
15:34
Speaker 1: So now let's see what Challenger are saying. Indexation typically
15:38
Speaker 1: results in higher taxation of capital gains. Now you've disagreed
15:43
Speaker 1: with that, Jack straight away. But here he says. This
15:46
Speaker 1: is Challenger. It says, so it shifts the tax relativities
15:50
Speaker 1: of growth paying stocks who don't pay dividends like say
15:54
Speaker 1: CSL okay does it pays a dividend, but it's microscopic
15:58
Speaker 1: against income in paying stocks. Let's say come with bank
16:02
Speaker 1: for instance, and then they say, for example, for two
16:06
Speaker 1: stocks with an eight percent total return, the growth stock
16:09
Speaker 1: will have a larger increase in the taxable capital gain
16:12
Speaker 1: than an income stock with a four percent diffident yield.
16:16
Speaker 1: Higher investor demand could increase the prices of income stocks
16:21
Speaker 1: relative to growth stocks. This is really interesting. We've got
16:24
Speaker 1: an issue already in the Australian share market. It would
16:28
Speaker 1: seem that we have too many dividend paying stocks. There's
16:31
Speaker 1: too much focus on dividend, there's not enough focus on growth.
16:36
Speaker 1: Is this going to Is these CGT changes going to
16:40
Speaker 1: actually sort of compound that problem?
16:44
Speaker 3: I don't think so too much. I mean, so I
16:48
Speaker 3: can never keep the money right and missed themselves they
16:50
Speaker 3: pay now. I'm in my early thirty so if I
16:53
Speaker 3: get paid income from a deep end, what am I
16:55
Speaker 3: going to do with that?
16:56
Speaker 2: You don't want to you know, ok? Yeah, you're not
16:58
Speaker 2: looking for it?
16:59
Speaker 3: Yeah, okay, so I'm most likely just going to put
17:02
Speaker 3: it straight back, And most companies do that with a
17:04
Speaker 3: dim day investment plan. They differences. You're probably getting the
17:08
Speaker 3: buy from the actually investor first, that they actually to
17:12
Speaker 3: say you're going to use it better than just point
17:15
Speaker 3: it out, which is not necessarily badly right, But.
17:18
Speaker 1: Doesn't it encourage the companies to even go higher on
17:22
Speaker 1: the dividend payout ratios and become less entrepreneurial.
17:27
Speaker 3: It could potentially. It is a hard one though, but
17:30
Speaker 3: it depends which situations from the companies. In more established
17:33
Speaker 3: ones always going to pay it more income because they
17:35
Speaker 3: can't use it. But your entrepreneurial ones are still going
17:38
Speaker 3: to be able to grow the business of much exceler
17:41
Speaker 3: the right even if the tax rates of the sign So.
17:47
Speaker 1: I don't want to put words in your mouth, but
17:49
Speaker 1: are you saying the management of these companies they shouldn't
17:51
Speaker 1: be driven by a tax tweak?
17:54
Speaker 3: Absolutely, that should not inform your decisions as a company.
17:58
Speaker 2: Okay, or as an investor.
17:59
Speaker 1: I imagine yes, to a certain extent, to a certain extent.
18:04
Speaker 1: You're right, Okay, very interesting. All right, we'll be back
18:06
Speaker 1: in a moment, folks. I have some questions, some very
18:08
Speaker 1: good questions from Christian and Simon for Jack.
18:13
Speaker 2: Talk soon.
18:22
Speaker 1: Hello, Welcome back to the Australian's Money Puzzle podcast. James
18:25
Speaker 1: Kirby here with Jack Tossl of the Partner's Wealth Group,
18:29
Speaker 1: which is of course one of the top of town
18:31
Speaker 1: financial advisors and Jack's boss, Matthew Cassidy was voted the
18:37
Speaker 1: number one financial advisor in the entire Baron's Top one
18:41
Speaker 1: hundred and fifty list last year, A point I would
18:44
Speaker 1: be remiss if I didn't tell you about because that is,
18:47
Speaker 1: of course produced by the Australian in conjunction with Barons
18:50
Speaker 1: of New York. We're all part of the one big,
18:52
Speaker 1: happy family, which is called news Corporation. All right now,
18:55
Speaker 1: first question from Kristen with a K K y R Hi.
19:01
Speaker 1: James loved the show. Some quick questions in relation to
19:04
Speaker 1: capital gainst tax on very old shares. I sold some
19:08
Speaker 1: shares to simplify things, and I moved them into exchange
19:12
Speaker 1: traded funds. Some were gifted by my grandparents forty years ago.
19:15
Speaker 1: Weren't you lucky? Others I bought around thirty years ago.
19:20
Speaker 1: My accountant asked when I purchased the shares of what.
19:22
Speaker 2: I paid for them? I have no records.
19:25
Speaker 1: Is there a simple way to reconstruct the old share
19:27
Speaker 1: purchase prices when you don't have the records? I reckon
19:31
Speaker 1: you come across some people like that, Jack, I reckon
19:33
Speaker 1: you come across pastoralists who have like BHP and granddad
19:37
Speaker 1: bought them in you know, nineteen fifty two.
19:40
Speaker 3: I will be honest with you. I have had a
19:42
Speaker 3: few of these come across my base. I'm going to
19:45
Speaker 3: be completely honest with you, absolute not mace. Is that right?
19:51
Speaker 2: There's no sort of calculator you can look up and.
19:53
Speaker 3: No, sometimes the captains to a best guess scenario, which
19:58
Speaker 3: I wouldn't necessarily advise on. You can technically find this
20:03
Speaker 3: information out, but it can be quite intensive and expensive.
20:07
Speaker 3: But where the registries have a service where say, for example,
20:10
Speaker 3: you have pass with CBA shares, I think it's about
20:13
Speaker 3: fifty dollars per they can go back in the records
20:16
Speaker 3: and check for that year and see if anything matches.
20:19
Speaker 1: But how about AI? Would AI do it for free?
20:23
Speaker 1: There's a service I reckon could be wiped out in
20:25
Speaker 1: a moment.
20:26
Speaker 3: Well exactly. That's a good point because the issue is
20:28
Speaker 3: being if you don't sometimes you can be targeted. You
20:31
Speaker 3: might know they're boor originally say from ninety five you
20:34
Speaker 3: pay for five years. You've got no idea though you
20:36
Speaker 3: could be paying ten times fifty dollars for your one
20:41
Speaker 3: pass with CBA shares. You do one for west Farms
20:44
Speaker 3: is there for example? You keep doing that and the
20:47
Speaker 3: money wraps up to a point where it might actually
20:49
Speaker 3: cost you more to get the cost basis than what
20:51
Speaker 3: you'll be able to sell them for that's absurd.
20:53
Speaker 1: But I mean, I know they have to allow for
20:55
Speaker 1: share splits and everything else, but so is there any
20:58
Speaker 1: easy answer for a Christian?
21:00
Speaker 3: Unfortunately not No.
21:02
Speaker 1: Okay, Christian, there you are. This is not advice. This
21:05
Speaker 1: is information only. It's gonna cost you. I would oh,
21:09
Speaker 1: I'm not going to advise on air, but I will
21:11
Speaker 1: say I would put it this way. I wouldn't take
21:13
Speaker 1: it so seriously in terms of the preciseness of all this,
21:16
Speaker 1: because I can't see how the ATO could double check.
21:20
Speaker 1: It can't be done so easily. All right, as long
21:23
Speaker 1: as you were earnest and honest and did your best.
21:26
Speaker 1: All right question from Simon. I like this question. There
21:30
Speaker 1: are media reports that'll be from people like the Australian
21:33
Speaker 1: newspaper that the fifty percent capital gains tax discount would
21:37
Speaker 1: be axed in favor of inflation indexation on new investments
21:40
Speaker 1: across every asset class, including shares. If this happens, do
21:45
Speaker 1: you think it will potentially kill the startup community because
21:49
Speaker 1: the tax payable when selling shares in a successful venture
21:52
Speaker 1: will tend towards the top marginal rate of forty seven
21:55
Speaker 1: instead of twenty three point five percent as it is now.
21:58
Speaker 1: Surely this will descend device the majority of new founders.
22:02
Speaker 1: This is a terrific question, Simon. I was involved. I
22:05
Speaker 1: was a shareholder and a startup myself. We started with
22:08
Speaker 1: you know where, three people, We ended up with fifty
22:10
Speaker 1: or sixty we sold and I learned the hard way
22:14
Speaker 1: about capital gainst tax and how it kicks in. You
22:18
Speaker 1: don't realize, I suppose when you begin something like a startup,
22:22
Speaker 1: how serious it might be, because you don't assume you're
22:24
Speaker 1: going to win or work, or that it's all going
22:27
Speaker 1: to pay off.
22:28
Speaker 2: And the argument put forward.
22:30
Speaker 1: By many entrepreneurs is that the system rewarded them for
22:34
Speaker 1: their risk and their hard work. But a tax person
22:38
Speaker 1: mould say, but that's not sorry, that's not actually the
22:41
Speaker 1: nature of capital gains tax.
22:44
Speaker 3: What do you think we're sparked a man before? So,
22:47
Speaker 3: depending on how long you hold an investment or how
22:50
Speaker 3: do you company, you can actually end up better off. Yeah,
22:54
Speaker 3: doing action in cats? Sorry, Jack?
22:57
Speaker 1: Can I just introupt when you can? When you say
22:59
Speaker 1: you could end up better off? That would hinge on
23:01
Speaker 1: the inflation rate.
23:03
Speaker 3: Yes, exactly. But one thing I want to mention as
23:07
Speaker 3: well is. Even though they're changing the method of calculating
23:10
Speaker 3: capital gang sects, there's still a lot of CARVACS exemption
23:13
Speaker 3: small business concessions where you can eliminate a lot of
23:17
Speaker 3: capital gangs taxes upon a despisal or abr business if
23:22
Speaker 3: it's up with certain size and there's been no talk
23:25
Speaker 3: about it has been changed whatsoever.
23:27
Speaker 2: What can you recall the basics of that.
23:30
Speaker 3: There's active ACCEP one is a fifteen ear test and
23:34
Speaker 3: the additional zuberaniation rather than.
23:37
Speaker 1: Okay, And I would add that there is the Turnbule
23:40
Speaker 1: era Innovation arrangement where companies that qualify and there's a
23:46
Speaker 1: few thousand that do qualify anyone who invested in them.
23:49
Speaker 1: There's a ten year tax exemption on that too. This
23:54
Speaker 1: would be I thought it would be really hard, and
23:56
Speaker 1: I thought you'd have to have a patent and it
23:58
Speaker 1: would all be high tech. Turns out it's self assessed.
24:01
Speaker 1: Don't you love that self assessed? I only wish we
24:04
Speaker 1: had heard about that one once upon a time when
24:06
Speaker 1: we had a startup. But the point I'm making is
24:08
Speaker 1: that there are many existing tax arrangements for a startup
24:13
Speaker 1: entrepreneurs still, though Paul Bassett, who you would have to
24:16
Speaker 1: take very seriously. Who created seek for instance, has been
24:19
Speaker 1: out there thumping the table saying that it's very repressive
24:25
Speaker 1: on entrepreneurs to bring in such changes. So it seems
24:30
Speaker 1: to be an open question.
24:31
Speaker 3: Jack. Yeah, it's a tough one on an early individual
24:36
Speaker 3: information of the excellent in wrestler. It's maybe it would
24:40
Speaker 3: be more research on that one.
24:42
Speaker 1: You see, he's a financial advisor, folks. He's going to
24:44
Speaker 1: take it one by one and he wants to know
24:46
Speaker 1: who you are and what your situation is. He's not
24:48
Speaker 1: he's not talking big picture, which is which is the
24:50
Speaker 1: right way to do it for a financial advisor. Terrific,
24:53
Speaker 1: Jack Tussell. Great to have you on the show again.
24:55
Speaker 3: Thanks to Amy.
24:56
Speaker 1: Jack.
24:56
Speaker 3: It's been absolute pleasure.
24:58
Speaker 1: Always a pleasure. That was Jack to Rustle of the
25:00
Speaker 1: Partner's Wealth Group. Okay, folks, keep in touch. Let's have
25:05
Speaker 1: some more emails and questions, some really good ones today
25:09
Speaker 1: and a couple of questions which I haven't come to yet.
25:11
Speaker 1: But where people are packaging up their questions two or
25:14
Speaker 1: three at a time, why not have you going to
25:15
Speaker 1: take the effort to send in something to the money
25:18
Speaker 1: Puzzle at the Australian dot com dot au ask a
25:21
Speaker 1: few questions. Today's show was produced by Leah Samago.
25:25
Speaker 2: Hope you Soon